Kiwifruit marketer Zespri says the amount of kiwifruit known to be contaminated with chemical residue could increase as growers log their spray data.
Several batches of a widely-used spray have been found to contain the chemical, didecyl dimethyl ammonium chloride (DDAC).
Many growers have used the spray as part of efforts to combat the vine-killing disease PSA-V which has spread to all the main kiwifruit growing areas of the North Island since it was first identified in November 2010.
Some of the Citrox BioAlexin spray was certified for organic use, but the DDAC contaminating it is forbidden for use in organics and banned altogether in New Zealand's key export market Japan.
Zespri discovered traces of DDAC during routine testing a fortnight ago.
General manager of science and innovation Dave Tanner says about 30% of growers have used the product and of these less than half have residues in their crops.
However he says not all growers spray at the same time, and some still need to submit spray logs which could reveal more contamination.
Mr Tanner says Japan has zero tolerance for DDAC so no kiwifruit with the residue will be sent to that market.
He says no fruit containing residue has been exported and for Zespri the problem is a logistical one of having to send fruit with DDAC traces to markets which will accept it.
Mr Tanner says at levels detected there would be no adverse impact on human health.
Contamination likely to hurt individual growers
New Zealand Kiwifruit Growers president Neil Trebilco says only 4% of kiwifruit nationwide is organic, and it's unlikely more than a quarter of that is affected.
But he says not being able to sell the fruit as organic will hurt independent growers.
"What you can use on organic production is extremely limited and this chemical is not allowed, and so that fruit will no longer be able to be sold as organic and so they lose the organic premium and that's a huge cost for those individual growers who are effected."
Certified Organic Kiwifruit Growers Association chairman Doug Voss says organic growers are upset to learn they have unwittingly sprayed their fruit with a banned chemical and can't understand how it has happened.
"They've applied a spray which is certified by BioGro, our certification agency, for organic kiwifruit and were applying it as part of a fight against PSA."
Mr Voss says any organic kiwifruit with residues of DDAC would be processed as conventional fruit.